Repowering or not, costs will rise

Publisher's Notebook

June 7, 2013

Last week's announcement by the Business Council of New York State opposing the repowering of two upstate power plants not only blindsided Dunkirk and Chautauqua County, it also has impacted the Finger Lakes region.

Besides the $500 million proposal by NRG to convert its plant here from coal to natural gas to produce electricity, the Cayuga Power Plant in the town of Lansing in Tompkins County has offered a similar plan that will cost between $60 million to $370 million if approved.

Consistent with most of this county's emotions, the council's stance has not sat well with the Tompkins County Chamber of Commerce, also a Business Council member.

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Last July, area officials hailed efforts to convert the Dunkirk NRG plant.

"I was surprised," said Jean McPheeters, president of the Tomkins County chamber, who was attempting earlier this week to reach out to the council to find out why it would make this statement.

"We had put in a comment to the Public Service Commission in favor of the project," she said. "It is enormously important to our community."

Tompkins County's situation mirrors what is happening here. Its plant, like NRG, is a good community partner and the largest taxpayer in the county. Both companies want to continue to do business in upstate, which is not always a popular choice.

On Sunday, our two editorials were not complimentary of the Business Council. We noted in announcing the opposition to the repowering project, the council was defying its mission statement of "Working to create economic growth, good jobs and strong communities across New York State."

The NRG and Cayuga plants, by making a potential combined $870 million investment in their facilities, fit that statement.

Business Council of New York State President and Chief Executive Officer Heather Briccetti, who made the announcement to oppose the repowering plans, dispatched Ken Pokalsky, vice president of government affairs for the council, and Darren Suarez, director of government affairs, to discuss the issue by telephone with the OBSERVER on Thursday morning.

Both Pokalsky and Suarez said they would be sending a commentary piece in the coming days to this newspaper regarding the council's position. It ultimately comes down to higher rates for users, specifically industry, if the two facilities move forward with its conversion.

"We're not against repowering," Pokalsky said. "We strongly support the operation. ... We are against how it will be financed."

Those comments, however, were not a part of the message that was communicated when the council's statement was made public. "We missed the mark when we announced our position," Pokalsky said.

Suarez said the Dunkirk plant, currently running at about 75 to 100 megawatts, would be adding another 325 megawatts in its repowering. That is not needed for our region, he believes, noting the proposal would "add an artificial cost to the overall power system mechanism."

Pokalsky does not expect customers in our region to see a decrease in the rates they pay in the future as well. He believes users here will continue to see their National Grid electricity bills rise, but still be less expensive than if the repowering does happen. "This isn't the right remedy," he said.

But what the Business Council believes to be best for the rest of the state, could spell major trouble for the city of Dunkirk, its schools and Chautauqua County. If a repowering of NRG is not approved by the state Public Service Commission, a greater burden will be added to area residents and industry.